Hello, ladies and gentlemen. Thank you for standing by for the GDS Holdings Limited First Quarter's 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there'll be a question-and-answer session. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Laura Chen, Head of Investor Relations for the company. Please go ahead, Laura. Thank you. Hello, everyone. Welcome to the first quarter 2023 earnings conference call of GDS Holdings Limited. The company's results were issued via Newswire Services earlier today and are posted online. A summary presentation, which we will refer to during this earnings call, can be reviewed and downloaded from our IR website at investors.gds-services.com. Leading today's call is Mr. William Huang, GDS Founder, Chairman, and CEO, who will provide an overview of our business strategy and performance. Mr. Dan Newman, GDS CFO, will then review the financial and operating results. Ms. Jamie Khoo, our COO, is also available to answer questions. Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor Provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks uncertainties is included in the company's prospectus as filed with the U.S. SEC. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that GDS earnings press release and this conference call include discussions of unaudited GAAP measure information, as well as unaudited non-GAAP financial measures. GDS press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited, most likely comparable GAAP measures. I will now turn the call over to GDS Founder, Chairman, and CEO, William Huang. Please go ahead, William. Okay, thank you. Hello, everyone. This is William. Thank you for joining us on today's call. Before I review the 1Q 2023 results, I would like to take a few minutes to highlight our strategic priorities for the next few years. What are we focused on? What are we trying to achieve? These priorities will be benchmarked for tracking our ongoing performance. The roots of our business are in mainland China. In the past couple of years, we began to expand overseas. The two regions in which we now operate, mainland China and international, are at different stages of development. Therefore, we have set different priorities for each region in order to achieve the best outcome for our shareholders. In Mainland China, we have grown our business over 20 years through several distinctive phases to become the leading carrier neutral data center platform. In the most recent phase of growth, as demand from cloud and the internet took off, our priority was to win new business. We achieved an unprecedented level of new bookings, established strategic relationships with all the leading customers, and increased our market share. Our resource strategy was a key success factor. We invested heavily in building up our asset base in all tier one markets in order to fulfill our customer requirements. five years ago, we had 20 data centers. Today, we have over 100. We believe it's the largest development program undertaken by any data center company globally. In addition to the existing asset base, we secured the land and energy quota to maintain continuous supply and growth for many years to come. Now, the market in mainland China is going through a period of adjustment. We are in a new phase, and we have reset our priorities accordingly. Our number one priority now is to deliver this RMB 6 billion backlog, which is a result of our past sales success. It is sufficient to drive our revenue growth by over 60% over the next few years. Number two, as we have already won many years of future business, we will be highly selective in pursuing new orders. We will target opportunities which are strategic, a good fit to our available capacity, a fast-moving schedule, and adapted financial returns. Number three, we will priority... We will prioritize increasing utilization of existing assets. We have a large asset base. Both in service and under construction, which is committed by customers, but not yet utilized. As a result, we can deliver the entire backlog with a relatively small amount of incremental CapEx. This enables us to achieve our growth targets while reducing annual CapEx to RMB 2 billion-RMB 3 billion ongoing forward. Number four, we will only initiate new projects if there is committed demand with confirmed moving schedule. We expect most of our new projects will be expansion phases of existing sites. Number five, building on our success with positive wave of cloud and internet demand, we will position our products and the technology to capture the coming wave of AI applications. For international, our priorities are winning new business and building market presence. Number one, we aim to develop our international business into a second growth engine, which creates significant additional value for GDS shareholders. Number two, we will anchor and de-risk our projects with orders from our home market customers as they expand overseas. Number three, we will also win significant business from top global customers, many of which are established relationships in China. Number four, we will take advantage of our low unit development costs, which comes from our scale, product, and the supply chain in China. Number five, we will build a standalone business under our international holding company, headquartered in Singapore, while maximizing synergies with GDS mainland China. In 1Q 2023, our gross new bookings was around 12,000 sq m, spread evenly between mainland China and international. Market demand in mainland China over the past few quarters has been a bit soft. This is mainly because large customers who committed to a scalable capacity will need more time to absorb their inventory. In this environment, as I just explained, we are targeting high quality business which meets our criteria. A good example is the 4,600 meter or 9 MW order, which we won for Shanghai 9, 18. The customer is a major Chinese financial institution. The pricing is reasonable, and the underlying asset is an expansion phase of our existing Pujian campus. On the international side, we won a 6,400 sq m or 36 MW expansion order from the anchor customer for our campus in Nusajaya TechPark, Johor. You may recall, that we are already building three data centers on site one, with total IT power capacity of 64 MW, which is fully committed by this customer. We started the two construction less than one year ago on greenfield land. We are using our prefab design and the product, shipped directly from China. We are incorporating liquid cooling for part of the capacity as required by the customer. Despite the fact that this is our first project in Southeast Asia, we will deliver the first fully powered data center on this site in early 3 Q 2023. We estimate that our unit development cost is 20% lower than the local market. The ability to construct so quickly and as such a low cost, give us comparing competitive advantages as we expand in the region. Our gross moving for the first quarter was around 13,000 sq m, which is consistent with the level of the past few quarters. Our customers are sounding more positive about their business outlook. New business initiatives and strategic development, as their business picks up, it will flow through to us one or two quarter later in terms of faster moving. To adjust to the current environment, we have slowed down our capacity expansion. In 1Q 2023, we brought 2,700 sq m of new capacity into service. Over the rest of the year, we plan to bring a further 57,000 sq m into service, spread between Mainland China and international. All of this capacity has solid customer commitments and confirmed moving schedules. As a result of our efforts to adjust the pace of development, our utilization rate has gone up from 67%- 72% over the past year. At the same time, our backlog for area in services has come down from 136,000 sq m to 110,000 sq m. Our Mainland China business is going through a three-year journey to achieve our goals. We are making progress quarter- by- quarter. We have already done the difficult part, which is to win high-quality new business and secure scarce resource. Now it's all about execution. Please stay a little patient and watch us deliver. Our international business is at a different story. There is a great market opportunities on our doorstep, and we know how to win. I'm excited about the prospects for us to create second GDS. Before I hand over to Dan, I would like to make a few comments about my personal position. After we published the AGM notice a couple of weeks ago, I acknowledged that investors have a number of concerns. GDS was born out of my vision more than 20 years ago. I have built an exceptional team, which has been a major success fact. For me, leading GDS is about much more than just the financial gains. It is driven by a passion to create something extraordinary. This dedication remains unwavering. I assure you that nothing has changed in this regard. I want to take this opportunity to address these concerns and emphasize my commitment to our company. I intend to purchase approximately 1 million ADRs, and possible more over the next 12 months, if I'm able to do so. In addition, if the AGM proposal is passed, I commit to the sustaining my ownership% above the new threshold. I firmly believe that our current share price does not reflect the true value of our company. I have complete confidence in our ability to enhance our business performance and achieve sustainable growth, thus create significant value for our shareholders. I will pass on to Dan for financial and operating review. Thank you, William. I would like to start by talking about our financial objectives, which mirror what William said about our business priorities. For Mainland China, Number one, we target to grow adjusted EBITDA at a mid-teens% CAGR by delivering the backlog. Number two, we will become free cash flow positive, by which I mean free cash flow before financing, within three years. There's already high visibility as to how we will achieve this goal. Number three, we will cap net debt at around current levels and target deleveraging to below 5x net debt to adjusted EBITDA. Number four, we will monetize assets to the extent required to recycle capital and keep within these financial parameters. Number five, we will sustain project-level unlevered post-tax IRRs of 10%-13% by keeping discipline about new business and resources. For international, one, we will pursue a low-risk investment strategy based on firm pre-commitments. Two, we will target the same investment returns on a portfolio basis as we do for Mainland China. Number three, we aim for international to contribute over 10% of our consolidated adjusted EBITDA within three years. Number four, we will take a segregated approach to financing, raising external equity and debt on a dedicated basis and not rely on the capital reserves of GDS Holdings. Number five, lastly, we will create additional value for GDS shareholders in a way which is measurable and helps our share price. Now I'll talk through our financial performance for the quarter. Turning to slide 20, where we strip out the contribution from equipment sales and the effect of FX changes. In 1Q 2023, our service revenue grew by 0.2%. Underlying adjusted EBITDA grew by 6.6% quarter-on-quarter. Turning to slide 21, net additional area utilized during the quarter was 6,085 sq m. As we disclosed previously, a large customer is redeploying around 17,000 sq m from our data centers in Beijing to two of our campuses in Langfang, Hebei Province. The move-out impacts us for the first three quarters of this year. Thereafter, the customer will move into the new locations over about six quarters. In totality, there will be a net increase of area utilized by this customer, with a timing difference. If we add back the churn in 1Q 2023, the underlying move-in rate was similar to previous quarters at around 12,600 sq m. We expect gross additional area utilized to continue at these levels in 2Q and 3Q 2023, to step up significantly in 4Q 2023, as we have contracts with faster move-in. Monthly service revenue per square meter was RMB 2,149 in 1Q 2023. We expect MSR to decline by around 4%, comparing the final quarter of this year with 4Q 2022. Turning to slide 22. For 1Q 2023, our underlying adjusted gross profit margin was up on the prior quarter by 1.4% points, and our underlying adjusted EBITDA margin was up by 2.8% points. At the GP level, this was mainly due to seasonally lower utility cost. At the EBITDA level, there was also some savings in SG&A. Our profit margins are going to fluctuate over the course of this year. Our guidance implied around 45% full- year adjusted EBITDA margin at the midpoint, which has not changed. Turning to slide 23. In 1Q 2023, our organic CapEx in Mainland China was around RMB 1.4 billion, and international CapEx was RMB 600 million. Looking at our financing position on slide 24. At the end of 1Q 2023, our net debt to last quarter annualized adjusted EBITDA ratio was 8.1x. If we add back the cumulative investment in international at around RMB 5 billion, or $700 million, the ratio is below 7x. Our effective interest rate for 1Q 2023 dropped to 4.3%. In January of this year, we issued a $580 million CB. As a result, our cash balance increased to RMB 10.2 billion, or $1.5 billion, at the end of the first quarter. In a few days from now, we expect to repurchase $300 million of an existing CB when it is put, which will leave our pro forma cash position at around RMB 8.2 billion or $1.2 billion. Over the remainder of 2023, we have RMB 2.4 billion of project loans to repay. We expect to draw down a similar amount of new project loans. Looking further ahead, in 2024, we have RMB 3.6 billion of project loans to repay. However, as a result of refinancing, which we are currently working on, we expect to reduce this number to RMB 2.1 billion. Once again, in 2024, the amount of debt repayment will be more or less equal to the amount of new drawdowns. Looking at our capital structure plan for mainland China on slide 25, as I mentioned, we target to cap net debt at around current levels over the next three years. We will, in effect, finance new investment through a combination of operating cash flow and asset monetization to the extent required. Our operating cash flow will strengthen with higher asset utilization and reduced input VAT as a result of lower CapEx. To give an update on the China Data Center Fund, we have signed a limited partnership agreement with the investor. We are now in the process of refinancing the first project, which we intend to inject into the fund. We expect to receive the net cash proceeds from the fund of RMB 1.45 billion on completion of the first asset injection in the middle of this year. Turning to slide 26 for international. We currently have six data centers under construction, two in Hong Kong and four in Johor. The portfolio totals over 120 MW IT power capacity, with over 100 MW of customer commitments. The cost to date is around $700 million, which we have financed with around $400 million of paid-up capital and shareholder loans, and around $300 million of external debt. We have already put in place long-term term loans for all of these projects. As I mentioned previously, we intend to raise additional equity externally, either at the project, country, or international hold co level. We will pursue these options over the remainder of the year. Turning to slide 27, we confirm that our guidance for FY 2023 revenue, adjusted EBITDA and CapEx remain unchanged. We'd now like to open the call to questions. Operator, please? Thank you. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. For the benefit of all participants on today's call, please limit yourself to one question. If you have more questions, please reenter the queue. Our first question comes from Gokul Hariharan from JP Morgan. Your line is open. Yeah, hi, thanks, William and Dan, for the comments. My question is on the new targets in China, in terms of delivering the existing backlog. Could you talk a little bit about what is the time horizon? Is it in the three-year period that you expect to deliver this backlog? What are you hearing from your existing customers in terms of the ability to shorten the kind of time to move in from contract for some of this backlog? Maybe also, if you could talk a little bit about what would be kind of where would you get to EBITDA margins? Are we going to stay at similar levels for EBITDA margins in the China business, or we see a higher level as we move into a bit more of a harvest mode for the China capacity? Thank you. Thank you, Gokul. Let me clarify the financial targets. The base year is 2023, and for most of the financial targets, we're talking about three years, plus or minus a few quarters. For the mid-teens, EBITDA, CAIDA, for free cash flow positive, deleveraging to below 5x, and incidentally, net income positive. We're talking about three years. For the delivery of the backlog, we didn't put a timeframe on that because it's a little bit meaningless as we will still have some new booking to be added to that. It's a, you know, a continuous process of adding new bookings and delivery. In this year, I think on a net basis, with the churn that we talked about, the net additional area utilize will be around 50,000 sq m. Next year, we expect that number to be probably 20,000 sq m higher than that. It's not, you know, that's our business plan base case. If you want to talk about in the more short term, what we're seeing move in, William? Yeah, the Gokul, I think it's too early to say that this will have a lot of positive things will affect today's this year's revenue. We do see some a positive signal from the market. I believe you are aware that our largest customer, they currently, they announced that they will split car business and also will target a go to list in any market, right? In the next 18 months, this is very positive for me, I think this is... There's a car China number one, number two, number three car, all cut their price, sales, selling price, which is also means they start to pursue market share. It's not like last year or last two years, just pause the business plan. That means very clear signal to pursue market share again. I think it will definitely will impact our moving, but so far, I think the whole sentiments have totally changed, but not affect our current. It's too early to say, affect our current moving. I do believe it will affect our next year or next two or three years moving schedule. I wish, and maybe if possible, they will bring the moving schedule more early. I just need to finish off and talk about the EBITDA margin expectations. I think once again, referring to a 3-year target, I'd say we're looking for at least 2% points higher EBITDA margin than we achieve in FY 2023. Got it. That's very clear. Thank you. Thanks, Dan and William. Thank you. One moment for our next question. We have a question from Jonathan Atkin from RBC. Your line is open. Thanks. You talked a little bit about synergies that you'll be getting in your international operations, you know, from China, and I think you talked a little bit about shipping some of the equipment, you know, into Malaysia. Can you talk a little bit more about, you know, whether it's revenue synergies or back office or operating synergies or other types of benefits that you will get between the core Chinese company and then offshore? Secondly, I was interested in the demand profiles that you're seeing internationally. You know, different demand dynamics. I think you've got fairly kind of single-threaded demand, at least currently in Johor. What does the perspective, kind of sales pipeline look like internationally? You know, is it Asian, is it Western customers? Maybe a little bit more color on that. Thank you. Synergy. Yeah. True. Hey, John, this is William. I think the, let me talk about the synergy between international business and the mainland China business. I think it's very obvious we can leverage this, our current product and supply chain and the customer platform. This is quite unique, which I don't think the other player in this region has this kind of the advantage. I think that's why we are very confident, based on our current advantage, we will follow up our customer. We will follow up our successful product in China, which I think we still very fully well developed the product, right? Also, the supply chain is very important as well. I think because GDS already gathered the reach the point, which we always build with largest builder in the world in the last couple of years. I think this is give us very unique position to get a much cheaper supply chain, right? Sales, sales pipeline. The pipeline, I think. Yeah, I think it's now kind of in a situation that everybody talk about it, Southeast Asia, which is true. Southeast Asia has a huge demand, right? Because if you look at it, a Chinese customer or a US customer, they all announced big plan in this region. This is not just an announcement based on what our, what's our dialogue between GDS and our customer. We do have the real demand in this region. In terms of pipeline, for us, I think, we still remain a very strong pipeline from China and also US customer. Again, as I say, we also see some domestic demand. Thanks very much. Thank you. One moment for our next question. We have a question from Frank Louthan from Raymond James. Your line is open. Great. Thank you. As you look forward, what% of your installs and sales do you think are gonna be AI related? Can you characterize the AI demand that you're seeing between the mainland China business and the international deployments? Thanks. Yeah. I think the number one, I think in China, I think we see it's a little bit early stage for AI driven demand, right? But it's happening right now. I think the in China, the big platform all announced it, already announced their AI stuff. But we think it is, it will impact our new booking maybe one year after or two year after. It's a little bit behind the what happened in U.S., but I think the, it will happen, right? This is in China. In outside international business, we have seen some, let's say, new demand configuration is more AI driven. Let's say we would... I already mentioned in our Southeast Asia data center, we already implement the liquid cooling stuff. This is mainly driven by the GPU type of server. I think this is mainly for the AI stuff. It's happening in Southeast Asia already. All right, great. Thank you very much. Thank you. We have a question from Peter Milliken from Deutsche Bank. Your line is open. Yeah. Hi, good evening, everybody. My question is about the forward sale. When was that first disclosed? Was it in the 2022 Form 20-F, or had it been announced previously? I hadn't heard of it before. Peter, it was disclosed at the time. Well, not one transaction, but they were disclosed at the time when the transactions were done. The counterparty banks, which certainly are amongst the largest banks in the world, were required to make disclosures and duly did so. You know, that was 100% in line with the legal requirements. At that time, the system employed by the U.S. SEC was that these disclosures were made in what so-called paper filings. Some institutional investors, I think, subscribe to services who search paper filings and, you know, access that information. You know, it, you know, as we know now, many do not. As a result, I think quite a few institutional investors who just kind of like relying on Bloomberg terminals are, you know, were not aware of the disclosure. Ironically, in April of this year, the SEC changed their system, those disclosures would have been made electronically now, it would have been, you know, accessible in the usual way. Right. Yes, I'm sure the people who invested in the secondary listing, would've liked to have known that. Look, my second question is really about why you wouldn't have prepared, the bonds to be ready for this, change of control event, potentially. You've had a few years where you've been aware of this. Why weren't you talking to them about changing covenants and rolling debt and things like that? Why does it lead to this sudden point where investors have to make a quick decision on agreeing to this change of control event? You know, Peter, we operate in an environment where we make very expensive disclosures. You know, in our articles of association, it states that if William's ownership, beneficial ownership, falls below 5%, then his Class B shares are automatically converted to Class A shares. I think everyone's known that as a risk factors in our Form 20-F. I think since the completion of our Hong Kong IPO, William's shareholding has been just above that threshold, and it could have gone below that threshold, for any number of reasons. You know, if we'd issued only a relatively small number of shares, in a capital raise, for example, his ownership would have gone below that threshold. I mean, this should be very clearly understood, right? It's simple disclosure. Yeah, we need to make some changes to our articles, subsequent to our Hong Kong IPO. This is something that all the companies in our category of US ADR companies with secondary listings had to commit after the Hong Kong IPO to implement certain changes to the articles. We felt that it would be convenient or appropriate to package together all the changes to the articles at the same time in our annual general meeting, which is what, you know, we're proposing to do. Got it. Okay. Thank you. Thank you. We have a question from Edison Lee with Jefferies Group. Your line is open. Thank you for taking my question. Hi, William and Dan. I have two questions. Number one is that one of your objectives at the early part of the PPT says that you are trying to shorten the lead time from investment to move into two, to less than two years. What is the average period right now, and what is your strategy to try to shorten that to less than two years? The second question is about what percentage of your backlog for every in-service is gonna hit that completion of the ramp-up period in the next, I would say, less than within 2023? No, no, I know. I missed the second part of the question, sorry. How much of the backlog- The second question is, what percentage of your backlog? Oh, oh, yeah. Okay, okay. Every in surface that will actually hit the completion of the ramp-up period. Sure. -in 2023. Sure. Thanks, thanks, Edison. I'll go- Yeah, go ahead. I'll go first. Yeah. I think, I think it's a characteristic of high to scale business, because the order size is very large. Customers need to pre-commit in order for data center companies to develop. You know, they commit for like an entire data center. But, it's pretty much standard for these contracts to give the customer quite a lot of flexibility over the amount of time that they move in. I think the cloud service providers, because, you know, their requirement is for continuous upscale. I think that they, in past, planned further ahead, and maybe, their resource plan was three or even more years ahead of time. You know, they, in our experience, habitually took the longest to move in, right? Their contracts would give them two years, and they would actually move in over a two-year period. That has extended to beyond two years. The internet companies, quite often, we'd see that they were not placing the orders so far ahead. Very often the requirement was urgent, maybe because their business was so dynamic, and, you know, their forecasting was not so well established. A key selection criteria would be, can you deliver in six months' time? Can you deliver in nine months' time? While the contract would typically still have a two-year move-in period, I would say on average, the internet companies moved in, move in faster. Maybe they move in more like one year. As you know, in the last year, the mix of our business by customer segment changed quite a bit. Cloud, which had been, I think, as high as, like, 70% or even more percent of our business, was 20% in terms of our new business last year. Internet was 60, and enterprise was 20. I think just that change in itself will lead to faster delivery. If you look at the totality of our backlog of over 200,000 sq m, I mean, well over 50% of that backlog is cloud. That's why we have to work through the delivery of the backlog. For the new, what we're targeting now, expect to see, you know, a shorter lead time from when the order is booked until the service delivery starts, and then a shorter move-in period. Does that mean that you are going to ask for a shorter move-in period, even for the traditional CSP customers? Or do you think you will try to expand customers in more into the non-CSP customers? Well, are we gonna try to, I guess, what we have as a contractual term... Yeah. Insist on a faster move-in period for cloud service provider customers. Yeah. I just mentioned that. Your plan? Yeah. Sorry. sorry, go ahead. Yeah. I think the moving parts. We expect, of course, the new bookings last year. The new booking mainly driven by the internet company. I think the more faster moving than a cloud. The cloud business last year is last two years is, I just mentioned, it's paused their business plan, right? Now the reboot, they boosted their new business plan right now. I think, I hope, I wish maybe it will happen. Possibly they will move more faster, start from next year. I think. I'm quite positive for this. Sorry, I just need to ask this follow-up. Does it mean that for new contracts, for new contracts with cloud service providers, to actually ask for less than two-year move-in? New contract? New contract, I think it's much faster than the two years. The new contract, as asking specifically whether the business we do with cloud service providers, we will insist on a faster move-in period. Is that right? The. With CSP. New contract with CSP. Yeah. Yeah, I think new contract, if we have the new contract, that means they have the real demand. Definitely we will ask for more ready to move in, right? Otherwise, they still have a lot of the inventory, right? If we have the new contract from the cloud, that means their demand's much stronger than they expect. Can you tell us whether you are going to ask for 1 year, one and a half year? Is there any particular target that you have here? As, as you're asking about the situation that hasn't arisen yet, I mean, we've got a, you know, more than 50% of our backlog is already, the terms already agreed. Yeah. And- Yeah. If you look at the size of our backlog relative to our annual move-in, you think it's at least 3+ years of new business there, right? Yeah, I think we already locked in most of the commercial terms for the next three or four years, new business. Okay. I mean, I just think we'll probably see not more than 20% of our new bookings will be cloud, going forward. I guess that is related to my second question, right? I want to know what% of your backlog for area and services will actually be completing that ramp-up period. I want to get a sense as to whether you are vulnerable to this completion period actually being extended, right, because of the slow movement, and how much would that impact your revenue? You know, Edison, I think it's simpler. I mean, I provide some guidance, not formal guidance, some direction on what is the, you know, annual net add in terms of area utilized. I commented on, you know, what we expect to see in 2024 as well. You know, I'm factoring in what I know bottom-up in terms of what's in those contracts and what we understand about our customers' intentions. It's probably a simpler approach is to take my direction, because I'm amalgamating a lot of different factors. Right. will there be situations where, because it hits a 2-year ramp-up period, so even if the capacity or the square meter utilizes below the committed rate, you will be able to charge the full price, or that certainly will not happen? Yes, we are able. Yeah, it's a commercial decision, right? We are able to charge the full price. Yeah. Yeah, that's true. Thank you. One moment for our next question. We have a question from Yang Liu with Morgan Stanley. Your line is open. Thanks for the opportunity. I have one question regarding the MSR trend. I think Dan just mentioned that you expect a 4% point drop by the end of this year. I just want to have a better view about how much of that will be driven by the mix change of company's new capacity, and how much will be driven by potential contract renewal? Because I saw in the back section of the presentation, you have around 10% of the contract about to renew this year. Does this MSR change, or what is the assumption of the contract renew in here, and behind the MSR drop? Thank you. once again, Yang Liu, this is a bottom-up number, which is an amalgamation of the contracts and the backlog, which we expect to deliver, and the outcomes that we're expecting in terms of pricing on contract renewals, and, you know, are reflected all in the guidance we gave, as direction we give on MSR, which, you know, is a 4Q versus 4Q number. By the way, I'll go further and say in 2024, we think that that MSR decline will be about around 2%- 3%. So it's simpler to take my direction, you know, rather than asking to sort of disaggregate it into all the parts, right? You're following what's happening in the U.S. Here we see that pricing is firmer, increasing in some tier one markets in the U.S. and in Europe. We're not in that situation yet in China. We think we may be one or two years- Behind. behind that. Even at current levels, you know, our projects give us, we think, you know, reasonable returns, if, you know, relative to our, to our cost of capital. I think the business is very sound at the current levels. You know, we will wait over the next one or two years, you know, hopefully see the market situation improve slightly somewhat in our favor. Got it. Thank you. Thank you. As there are no further questions, I'd like now to turn the call back over to the company for closing remarks. Thank you once again for joining us today. If you have further questions, please feel free to contact GDS Investor Relations through the contact information on our website or The Piacente Group Investor Relations. See you next time. Bye-bye. This concludes the conference call. You may now disconnect your line. Thank you!